Buying your first home – a step by step guide

Buying your first home can be daunting. You may not know where to start so find yourself speaking with friends / family or scrolling online to get a better understanding of the process. You may read / hear different things that contradict one another – so here is our 7- step guide to homeownership, that should make things a little simpler for you.

  1. Setting a budget
  2. Getting a mortgage in principle
  3. Viewing properties
  4. Making an offer
  5. Instructing a solicitor & applying for your mortgage
  6. Exchange contracts
  7. Completion

 Setting a budget – Before viewing properties, it’s important to understand exactly what your budget is. Everybody’s situation is different and there’s a little more that goes into assessing your affordability than looking at monthly payments on Rightmove’s mortgage calculator.  Lenders typically lend anywhere between 4-5.5x your annual income – where you sit on that scale will depend on a number of things (your income, expenditure, the size of your deposit, the type of property you’re buying and your credit score).  A mortgage adviser can look at these things and quite quickly be able to give you an indication as to what you might be able to borrow. So before viewing properties, get in touch with an independent mortgage adviser.


Getting a mortgage in principle – After an initial consultation with a mortgage broker, they should have gathered enough information to complete a mortgage in principle (MIP). You may also hear this referred to as an agreement in principle (AIP) Or a decision in principle (DIP). A MIP involves a credit check, and is best described as half a mortgage application. If successful, the lender will produce a certificate (which in most cases is valid for 90 days) the certificate will state the maximum borrowing amount available and should give you the confidence to start offering on properties. A MIP is used to confirm that your mortgageable and most estate agents will ask for this when you book viewings / offer on properties.


Viewing properties – The exciting part. Most people will start their viewing journey by looking on Rightmove & Zoopla.  We tend to see that most properties for sale are published on these two websites, and they’ve both got good filter functions to allow you to look in a specific area at a set price.  Buying your first property is one of the biggest investments you’ll make so its advised to fill your diary with viewings to get a feel for what works for you. Some people will offer after their first viewing, others tend to view at least a handful before placing an offer.  Which have a free checklist available for home buyers with some useful questions to ask when viewing properties.


Making an offer – Once you’ve found something you like, its time to put an offer forward and agree a final price. If there are other interested parties, you might find yourself in a negotiation with the estate agent. Whilst the highest bidder is often the decider for the seller / estate agent – most sellers are keen for an efficient transaction. If the difference in the offers is not significant, you might find that your buying position could be favourable and ultimately lead to them accepting your offer. Things like – having your mortgage in principle and a solicitor ready to go, not being in a ‘chain’ (having a property of your own to sell, before you can go ahead) and even just demonstrating that you’re organized and responsive can help you stand out from other interested parties.


Instructing a solicitor & applying for your mortgage – By this stage you would have received the good news that your offer has been accepted. Its important to let your solicitor and mortgage adviser know as soon as possible to prepare the necessary paperwork. When applying for the mortgage, this is when you’d find out what interest rate / monthly payments you would be offered. Generally speaking, it takes around 2-3 weeks for the mortgage application to be assessed and for you to receive the formal mortgage offer.


Exchange contracts – Between getting your offer accepted and exchanging legal contracts, on average you’d be looking at a timeline of about 3-4 months. Exchanging contracts is when the transaction becomes legally binding, so no turning back at this point!


Completion – This can in as little as a day after exchange of contracts, but normally within a week or two. At completion stage, you can now pick up the keys and are the legal owner of the property.


If this has got you thinking, we’d be delighted to help.  Get in touch and we’ll talk you through your options, or sign up to our monthly newsletter, to keep your finger on the pulse. 


Sam Mason – 17th February 2023